There are now over 50 million homes worldwide that receive their television service over internet protocols. The number of homes in Europe receiving television over broadband will treble by 2020. By then it is predicted that a third of broadband homes will subscribe to an IPTV service, taking the European market to some 60 million homes. The emergence of other online video services delivered over the top of third-party networks will further increase competition.
Oliver Johnson, the chief executive of specialist broadband research company Point Topic said: “We’re projecting just over 160 million broadband subscribers in the EU27 by 2020 and just over one in three will take an IPTV subscription.”
Europe is the largest market for IPTV services, accounting for over 43% of subscriptions, although Asia is likely to overtake it in 2012.
France is still the largest single market by territory, with over 11 million IPTV subscribers, representing half of broadband homes in the country.
China has 10.5 million IPTV subscribers, followed by the United States with 8.1 million, South Korea with 4.2 million and Japan with just over 3 million. Germany has 1.6 million and Belgium has over a million, according to Point Topic figures released by the Broadband Forum.
The success of IPTV depends on network availability and affordable pricing, as well as on competition from existing television services.
“Where the cost and the link are suitable there is demand for IPTV as we’ve seen in France,” explained the chief executive of Point Topic. “However in many markets not only are cost and availability significant barriers but the incumbent television services are well entrenched.”
“The success of IPTV in France compared to other countries in Europe and worldwide can’t be attributed to a single reason. A number of conditions exist which has made the diffusion of IPTV through the market much easier and quicker than in others, perhaps the main driver has been competition.”
“France, with Free Internet as a good example, has much clearer and more transparent tariffs for IPTV and that has not only earned the consumers trust but allowed them to align the value they derive from the services with the amount they pay,” he continued. “It’s a simple equation but not the natural approach we’ve become used to from operators. Often the price isn’t obvious for each bundle constituent, and there are a number of reasons for this, but the end result is that the consumer resists purchase far more than they might if they felt they had better information.”
Point Topic has analysed over 2,000 standalone and bundled tariffs from around the world in 2011.
“We estimate that a consumer will pay 66 US dollars per month on average today for a broadband plus IPTV service. If we split out the broadband charge we get revenues today of just over 5.3 billion dollars a year for IPTV services rising to 14.8 billion in 2020 in the EU27.”
Television and video services delivered over the top of third-party broadband networks will intensify competition. “The entrance of Google and Apple in particular into the internet TV market could be a game changer,” notes Oliver Johnson. “Along with services like Netflix, Hulu and offerings from other OTT suppliers, we could see a significant increase in competition and, hopefully for consumers, more clarity and lower prices.”